SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________
COMMISSION FILE NUMBER: 000-29331
IKON VENTURES, INC.
(Exact name of Small Business Issuer as Specified in its Charter)
NEVADA 76-0270295
(State or Other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification No.)
Suite 305, Collier House, 163/169 Brompton Road, London, England SW3 1PY
(Address of Principal Executive Offices)
011-171-591-4435
Issuer's Telephone Number. Including Area Code
Check whether the issuer (1), has filed all reports required to be filed by
Section 13 or 15(d) of The Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes x No
--- ---
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: As of May 5, 2001 the registrant had
310,890 shares of Common Stock outstanding.
IKON VENTURES, INC.
FORM 10-QSB
For the Quarter Ended March 31, 2001
Index Page
Number
PART I FINANCIAL INFORMATION
Item 1 Balance Sheets at March 31, 2001 and December 31, 2000 3
(unaudited for March 31, 2001 period)
Statements of Operations for the three month periods
ended March 31, 2001 and March 31, 2000 (unaudited) 4
Statements of Cash Flows for the three month periods
ended March 31, 2001 and March 31, 2000 (unaudited) 5
Notes to Unaudited Financial Statements 6
Item 2 Management's Discussion and Analysis or Plan of Operation 11
PART II
Item 1 Legal Proceedings 12
Item 2 Changes in Securities 12
Item 3 Defaults Upon Senior Securities 12
Item 4 Submission of Matters to a Vote of Security Holders 12
Item 5 Other Information 12
Item 6 Exhibits and Reports on Form 8 - K 12
2
IKON VENTURES, INC.
BALANCE SHEETS
March 31, 2001 December 31,
Notes (Unaudited) 2000
$000 $000
Assets
Current assets
Cash and cash equivalents 0 19
Prepaid and other current assets 3 3
--------- ---------
Total current assets 3 22
Property, plant and equipment, net 2 3
5 25
========= =========
Liabilities and stockholders' equity
Current liabilities
Trade accounts payable 37 6
Accrued expenses and other 158 169
--------- ---------
Total current liabilities 195 175
Total liabilities 195 175
--------- ---------
Stockholders' equity
Common stock, $0.001 par value. Authorized 100,000,000 shares; issued and 31 31
outstanding 310,890 shares in 2001 and 31,089,000 shares in 2000
Additional paid-in capital 11,799 11,799
Accumulated deficit (12,020) (11,980)
--------- ---------
Total stockholders' equity (190) (150)
--------- ---------
Total liabilities and stockholders' equity 5 25
========= =========
The accompanying notes are an integral part of these financial statements.
3
IKON VENTURES, INC.
STATEMENTS OF OPERATIONS
THREE MONTH PERIODS ENDED MARCH 31, 2001 AND MARCH 31, 2000
(UNAUDITED)
Notes March 31, 2001 March 31, 2000
$000 $000
Net sales - -
Cost of goods sold - -
--------- ---------
Gross profit - -
Selling, general and administrative expenses (40) (167)
--------- ---------
Operating loss - continuing operations (40) (167)
Loss from continuing operations before provision for income taxes (40) (167)
Provision for income tax 5 - -
--------- ---------
Loss from continuing operations (40) (167)
Net loss 2 (40) (167)
========= =========
Loss per common share (basic) ($0.129) ($0.011)
========= =========
The accompanying notes are an integral part of these financial statements.
4
IKON VENTURES, INC.
STATEMENTS OF CASH FLOWS
THREE MONTH PERIODS ENDED MARCH 31, 2001 AND MARCH 31, 2000
(UNAUDITED)
Note March 31, 2001 March 31, 2000
$000 $000
Net cash used by operating activities 6 (19) (4)
--------- ---------
Cash flows from investing activities
Proceeds from disposal of discontinued operations - -
Proceeds from disposal of property, plant and equipment - -
--------- ---------
Net cash provided by investing activities - -
--------- ---------
Cash flows from financing activities
Proceeds from issuance of common stock
- -
Net cash provided by financing activities - -
--------- ---------
Net decrease in cash and cash equivalents (19) (4)
Cash and cash equivalents at beginning of year 19 13
--------- ---------
Cash and cash equivalents at March 31 0 9
========= =========
Major non-cash transactions
In February, 2001 the Company effected a one for one hundred reverse stock
split.
The accompanying notes are an integral part of these financial statements.
5
IKON VENTURES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
March 31, 2001
1 Summary of significant accounting policies and practices
(a) Description of business
Ikon Ventures, Inc. ("the Company") was incorporated in Nevada on May
31, 1997. The Company operated a Zeolite and related chemicals
production facility in Mira, Italy, through its main subsidiary
Zeolite Mira S.r.l. ("Zeolite Mira"). The Company's customers were
major European detergent companies with a small proportion of
production being sold through trading companies.
At the beginning of 1999 Zeolite Mira was sold. The Company now has no
trading operations and is exploring new opportunities.
(b) Cash equivalents
The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents.
(c) Property, plant and equipment
Property, plant and equipment are stated at cost. Depreciation on
plant and equipment is calculated on the straight-line method over the
estimated useful lives of the assets.
(d) Research and development
Research and development costs are expensed as incurred. There were no
research and development costs in the three months ended March 31,
2001 and 2000.
(e) Income taxes
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change
in tax rates is recognized in income in the period that includes the
enactment date.
IKON VENTURES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
March 31, 2001
(continued)
1 Summary of significant accounting policies and practices (continued)
(f) Commitments and contingencies
Liabilities for loss contingencies, including environmental
remediation costs, arising from claims, assessments, litigation, fines
and penalties, and other sources are recorded when it is probable that
a liability has been incurred and the amount of the assessment and/or
remediation can be reasonably estimated. Recoveries from third parties
which are probable of realization are separately recorded, and are not
offset against the related environmental liability, in accordance with
Financial Accounting Standards Board Interpretation No.39, Offsetting
of Amounts Related to Certain Contracts.
In October 1997, the American Institute of Certified Public
Accountants issued Statement of Position ("SOP") 96-1, Environmental
Remediation Liabilities. SOP 96-1 was adopted by the Company on
January 1, 1998 and requires, among other things, environmental
remediation liabilities to be accrued when the criteria of Statement
of Financial Accounting Standards ("SFAS") No. 5, Accounting for
Contingencies, have been met. The guidance provided by SOP 96-1 is
consistent with the Company's current method of accounting for
environmental remediation costs and, therefore, adoption of this new
statement does not have a material impact on the Company's financial
position, results of operations, or liquidity.
The Company accrues for losses associated with environmental
remediation obligations when such losses are probable and reasonably
estimable. Accruals for estimated losses for environmental remediation
obligations generally are recognised no later than completion of the
remedial feasibility study. Such accruals are adjusted as further
information develops or circumstances change. Costs of future
expenditures for environmental remediation obligations are not
discounted to their present value. Recoveries of environmental
remediation costs from other parties are recorded as assets when their
receipt is deemed probable.
(g) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting periods. Actual results
could differ from these estimates.
IKON VENTURES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
March 31, 2001
(continued)
1 Summary of significant accounting policies and practices (continued)
(h) Impairment of long-lived assets and long-lived assets to be disposed
of
The Company adopted the provisions of SFAS No 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of, on January 1, 1997. This Statement requires that
long-lived assets and certain identifiable intangibles be reviewed for
impairment whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. Recoverability
of assets to be held and used is measured by a comparison of the
carrying amount of an asset to future net cash flows expected to be
generated by the asset. If such assets are considered to be impaired,
the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceed the fair value of the assets.
Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell.
(i) Foreign currency translation
Assets and liabilities denominated in foreign currencies are
translated into US dollars at current exchange rates. For operations
using the US dollar or the currency of a highly inflationary economy
as their functional currency, translation gains or losses are
generally reported in non-interest revenues. Translation gains and
losses for operations using any other currency as their functional
currency are reported, net of tax effects, in stockholders' equity as
cumulative translation adjustments.
2 Financial position and basis of accounting
These consolidated financial statements have been prepared on a going
concern basis which contemplates the commencement, continuation and
expansion of trading activities as well as the realization of assets and
liquidation of liabilities in the ordinary course of business.
During 1997 the Company acquired the net liabilities of Zeolite Mira,
issuing shares to finance the acquisition. The Company traded at a loss
during 1997 and Zeolite Mira continued to record losses in 1998, depleting
the Company's cash resources. The Company sold Zeolite Mira in 1999
resulting in the Company having no operating entities.
Management's future plans for the Company are to enter into a business
combination with one or more as yet unidentified privately held businesses.
The Company's continuation as a going concern is dependent on its ability
to issue new stock which will be required to fund the purchase of
additional businesses. This factor among others may indicate that the
Company may be unable to continue as a going concern for a reasonable
period of time. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
IKON VENTURES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
March 31, 2001
(continued)
3 Acquisitions and dispositions
There have been no acquisitions or dispositions in 2000 and 2001.
4 Fair value of financial instruments
SFAS No 107, Disclosure About Fair Value of Financial Instruments, requires
certain disclosures regarding the fair value of financial instruments. Cash
and cash equivalents, trade accounts receivable, other current assets,
trade accounts payables and accrued expenses are reflected in the
consolidated financial statements at fair value because of the short term
maturity of these instruments.
5 Income taxes
No credit has been taken for the operating losses which potentially give
rise to a deferred tax asset for the Company, on the grounds that the
directors do not believe that the company will be able to derive any value
from such an asset.
6 Reconciliation of net loss to net cash provided by operating activities
The reconciliation of net loss to net cash provided by operating activities
was as follows:
March 31, 2001 March 31, 2000
$000 $000
Net loss (40) (167)
Adjustments to reconcile loss to net cash provided by operating
activities:
Issue of common stock in payment of supplier
- 40
Changes in assets and liabilities net of effect from acquisitions and
disposals:
Depreciation and amortisation of property, plant and equipment 1 -
(Decrease) increase in accounts payable 31 47
(Decrease) increase in accrued expenses and liabilities (11) 36
Decrease (increase) in prepayments and other assets - 40
--------- ---------
Cash used by operating activities (19) (4)
9
IKON VENTURES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
March 31, 2001
(continued)
7 Stock option and compensation plans
In 1999, the Company adopted the Ikon Ventures, Inc.1999 Incentive Program
( the "1999 Plan") that permits the granting of any or all of the following
types of awards: stock options, stock appreciation rights, in tandem with
stock options or free standing, and restricted stock grants. The aggregate
number of shares that may be issued or transferred under the 1999 Plan is
22,500 ( after giving effect to the reverse split effected in February
2001), subject to adjustment under certain circumstances. As of March 31,
2001, no award had been made under the 1999 Plan.
In February 2001, the Company adopted the Ikon Ventures, Inc. 2001 Stock
Compensation Plan (the "2001 Plan") that provides for the payment of
compensation for services rendered through the award of shares of the
Company's common stock. The aggregate number of shares that may be awarded
under the 2001 Plan is 5,000,000 provided that no award may be issued that
would bring the total of all outstanding awards under the 2001 Plan to more
than 20% of the total number of shares of the Company's common stock at the
time outstanding. As of March 31, 2001, no award had been made under the
2001 Plan.
8 Related party transactions
Mr. I.W. Rice, a director of the Company, paid the following amounts in
settlement of a debt to a supplier during the three month period ended
March 31 2000. The amounts paid have been shown as a liability of the
Company and are payable to Mr. Rice.
March 31, 2001 March 31, 2000
$000 $000
Debt settled on behalf of IKON - 15
========== ==========
9 Business and credit concentrations
The business is not currently trading and has no concentration of business
or credit risk.
10
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results Of Operations
The Company has been inactive since April 1999, when it disposed of all of
its then operations. Accordingly, management believes that comparison between
the results of operations for the current period and prior periods would not be
meaningful.
Liquidity And Capital Resources
As of March 31, 2001 and May 5, 2001, the Company had no liquid assets. The
Company has no commitments for any capital expenditure and foresees none.
However, the Company will incur routine fees and expenses incident to its
reporting duties as a public company, and it will incur fees and expenses if it
makes or attempts to make an acquisition. The Company expects no significant
operating costs other than professional fees payable to attorneys and
accountants.
The Company does not anticipate that funding will be necessary in order to
complete a proposed business combination, except possibly for fees and costs of
the Company's professional advisers. Accordingly, there are no plans to raise
capital to finance any business combination, nor does management believe that
any combination candidate will expect cash from the Company. The Company hopes
to require the candidate companies to deposit with the Company an advance that
the Company can use to defray professional fees and costs and travel, lodging
and other due diligence costs of management. Otherwise, management would have to
advance such costs out of their own pockets, and there is no assurance that they
will advance such costs.
Other routine expenses, such as making required filings with the SEC and
related expenses will inevitably be incurred. In order to pay these, the Company
will be forced to borrow money or prevail upon existing shareholders to provide
additional capital, whether as a loan or investment, to the Company. It is by no
means certain that existing shareholders will want or be financially able to do
so. There are no plans to sell additional securities of the Company to raise
capital. The Company's failure for any reason to timely file reports required
under the Securities Exchange Act of 1934, as amended, could subject it to fines
and penalties and make it less desirable to a potential combination candidate.
None of these sources of funds is assured and, if no funds can be raised, the
Company may be effectively unable to pursue its business plan.
The Company's shareholders and management members who advance money to the
Company to cover operating expenses will expect to be reimbursed by the company
acquired, prior to or simultaneously with the completion of a combination. The
Company has no intention of borrowing money to pay any officer, director or
shareholder of the Company or their affiliates.
Forward Looking Statements
This Form 10-QSB and other reports filed by the Company from time to time
with the Securities and Exchange Commission (collectively the "Filings") contain
or may contain forward looking statements and information that are based upon
beliefs of, and information currently available to, the Company's management as
well as estimates and assumptions made by the Company's management.
When used in the filings the words "anticipate", "believe", "estimate",
"expect", "future", "intend", "plan" and similar expressions as they relate to
the Company or the Company's management identify forward looking statements.
Such statements reflect the current view of the Company with respect to future
events and are subject to risks, uncertainties and assumptions relating to the
Company's operations and results of operations and any businesses that may be
acquired by the Company. Should one or more of these risks or uncertainties
materialize, or should the underlying assumptions prove incorrect, actual
results may differ significantly from those anticipated, believed, estimated,
intended or planned.
11
PART II OTHER INFORMATION
Item 1 Legal Proceedings
None
Item 2 Changes in Securities
None
Item 3 Defaults Upon Senior Securities
None
Item 4 Submission of Matters to a Vote of Security Holders
At a duly called special shareholders' meeting on February 16, 2001, the
shareholders of the Company approved the following actions by the votes
indicated:
Matter Number of Votes For Number of Votes Against Abstentions
- ------ ------------------- ----------------------- -----------
One-for-one-hundred reverse stock split 16,000,500 500 250
of the issued and outstanding shares of
Common Stock
Adoption of 2001 Employee Stock 16,000,750 500 0
Compensation Plan
Amendments to Bylaws 16,000,750 0 500
Item 5 Other Information
None
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
12
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized
IKON VENTURES, INC.
Date May 14, 2001 By: /s/ Ian Rice
-------------------------------
Ian Rice
Chairman and CEO